' BASHARAT AHIvIAD SHAIKH, J.-These three appeals raise common points of law and are, therefore, being disposed of together. Employees Old-Age Benefits (Extension of Functions to Azad Jammu and Kashmir) Act, 1980 was purportedly enacted by the Azad Jammu and Kashmir Council on 31st July, 1980, but it was subsequently found by the superior Courts of Azad Jammu and Kashmir to have been enacted without lawful authority because at the relevant time the Azad Jammu and Kashmir Council was not legally complete To meet the situation, a validation law known as the Azad Jammu and Kashmir Council (Validation of Laws) Act, 1995 was enacted by the Azad Jammu and Kashmir Council on 12th July, 1995. Under section 2 of the said Act laws specified in the Schedule to that Act, alongwith rules, regulations, by-laws made thereunder, were declared to have been validly made by the competent Authority. All actions taken, orders passed, notifications issued, appointments made etc. In the laws mentioned in the Schedule were also declared as valid.
The Schedule consisted of thirty six laws including the Employees Old-Age Benefits (Extension of Functions to Azad Jammu and Kashmir) Act, 1980 (Act X of 1980).
2. Appellant No,4 in Civil Appeal No,90 of 1999, Assistant Director, Employees Old-Age Benefits Institution, Regional Office, Jhelum, issued a notice to M/s. Jabeer Hotel Mirpur on 11th October, 1989 to get Jabeer Hotel registered with the Institution but there was no compliance. Reminders were subsequently issued on 20th January, 1990 and 8th May, 1990 but the Hotel did not register itself with the Institution. Thereafter, a final notice was given on 5th June, 1990 but it bore no fruit.
Assistant Director prepared survey report in which he stated that fifty two persons were employed in the Hotel. Thereafter, registration number was allotted to Jabeer Hotel on 4th August, 1990 and the Hotel Was directed to provide books of accounts for inspection but the Hotel did not respond.
Thereafter, assessm ent was made for the period falling between December, 1986 to February 1991 (51 months) at the rate of Rs,3,000 per month amounting to Rs,1,53,000 and the statutory increase at the rate of fifty per cent. Under section i3 of the Act was also added to it. Subsequently a letter was written to the Collector Mirpur for recovery of Rs,5,31,000 from Hotel Jabeer. Under the direction of the Collector, Assistant Collector Grade-II (Tehsildar) issued notice to M/s. Jabeer Hotel on 15th May, 1997. The notices were challenged by Jabeer Hotel by filing a writ petition in the High Court.
3. Facts in Hafiz Textile case are that Assistant Collector (1st class) Employees Old-Age Benefits Institution Jhelum Region, Old GT Road Jhelum, issued a summon on 30th March, 1991 addressed to Messrs Hafiz Textile Mills Limited Mirpur under section 81 of the Land Revenue Act, 1967 calling upon the said company to make payment of a sum of rupees fifteen lacs on or before 20th April, 1991. It was threatened that if the company failed to do so the proceedings under sections 82 and 83 of the Land Revenue Act would be initiated. Hafiz Textile Mills Limited filed a writ petition in the High Court to challenge the proceedings.
4. Judgments in both the cases have been separately written but both the cases were treated as interconnected matters and there is mention of one in the other. Written arguments were also filed which are attached with the writ petition filed by Hafiz Textile Mills Limited. Both the writ petitions have been allowed. The High Court has held that the Employees Old-Age Benefits (Extension of Functions to Azad Jammu and Kashmir) Act, 1980 (Act X of 1980) was validly enacted. The High Court has upheld the vires of the Act on the ground that it is covered by the subject listed at serial No,15 of the Council Legislative List (The law of insurance and regulation of the conduct of insurance business). However, it has been held that Validation Act of 1995, mentioned above, was a fiscal enactment which could not be given retrospective effect. It has also been held that Financial Commissioner Azad Jammu and Kashmir was not legally competent to authorize the officials of the Revenue Department to make recovery of outstanding amounts claimed by the EOB Institution.
It was consequently held that recovery could be made from 12th July, 1995 when the Validation Act mentioned above was passed. Referring to a general notification issued by the Azad Jammu and Kashmir Council by which employees of (Pakistan) EOB Institution were authorised to function in Azad Jammu and Kashmir, it has been held that functioning of such employees would become valid in Azad Kashmir only when they are specifically notified rather than through a general notification.
5. Three petitions for leave to appeal were filed in this Court. Leave was granted in all of them.
Appeal No,90 of 1999 has been filed by Azad Jammu and Kashmir Council, Assistant Collector (Grade-1), EOB Institution Jhelum, Mushtaq Ahmad Malik, Executive Officer, Field Office Mirpur and Assistant Director EOB Institution Regional Office Jhelum to challenge the declaration given by the High Court that Validation Act under reference would have no retrospective effect. The declaration that the Financial Commissioner Jammu and Kashmir was not legally competent to authorize the officials of the Revenue Department to effect the recovery of EOB Institution dues under the Land Revenue Act has also been challenged. Civil Appeal No,91 of 1999 has been filed by Assistant Director Grade-1 EOB Institution Jhelum and Azad Jammu and Kashmir Council Islamabad to challenge the judgment given in the Hafiz Textile Mills case which is on the identical lines as the judgment in the Jabeer Hotel case. The appeal filed by Messrs Jabeer Hotel, (Civil Appeal No,89 of 1999) needs to be separately noticed.
6. Jabeer Hotel has raised the following grounds for setting aside the judgment of the High Court:- "(i) that the Council is not competent to extend any law which is in operation in any other country to Azad Kashmir.
(ii) that the Council is not competent to extend the function and operation of any department of Pakistan.
(iii) that any department functioning in Pakistan cannot legally direct any employee of the Azad Jammu and Kashmir Government to act on its behalf and operate its orders,
(iv) that in the judgment no reasons have been given that since 1995 EOBI Act will be deemed to be in operation in Azad Jammu and Kashmir and that the recovery made after 1995 will be deemed to be according to law.
(v) that the verdict in the judgment that EOBI Act functions as Insurance Act and the amount recovered under it is for the insurance of the employees is legally incorrect."
7. It may be observed that in the judgment of the High Court there is no mention of grounds mentioned at (i), (ii) and (iii) above. It was vehemently contended by Khawaja Ali Muhammad, the learned counsel for Jabeer Hotel, that the most important point to which the aforementioned grounds relate was urged before the High Court but has been left undecided by the High Court.
According to the learned counsel, he raised the point before the High Court that the Azad Jammu and. Kashmir Council and the Azad Jammu and Kashmir Assembly are not competent to extend the jurisdiction of any outside institution to Azad Kashmir territory or to empower any employee of the department of Pakistan to perform functions in Azad Kashmir. Khawaja Ali Muhammad has also referred to the following part of his written arguments which form part of the Hafiz Textile Mills file,-- "The Council firstly is not empowered or competent under 1974 Interim Constitution to extend any law to Azad Jammu and Kashmir. In Azad Jammu and Kashmir EOB Institution was not in operation in any district and the Council then extended the law to other district. The law is in opeation in Pakistan and the Federal Government can extend any Federal law to any province. In this case the Council has not made any law but has extended the law passed by the Federal Government of Pakistan to Azad Kashmir territory."
' He also drew our attention to the following portion of the written arguments:-- "The Council has not been empowered to extend the jurisdiction of Federal and Provincial Institution to Azad Kashmir. The institution will not be under the administrative or supervisory control of the council or the Azad Government."
' At another place it was stated that:- "An officer of the Government of Pakistan sitting at Rawalpindi or Jhelum, outside the territory of Azad Kashmir, will have jurisdiction in Azad Kashmir. The -Federal Government has not bestowed such powers to its employees because legally it could not do it."
9. The learned counsel also drew out attention to the fact that the leaned Judges in the High Court have noted the following grounds on which the writ petitions were based:- "(a) That the Employees Old-Age Benefit Act has been enforced in Azad Kashmir without a lawful authority. The Azad Jammu and Kashmir Council has no authority to enforce this Act in Azad Kashmir;
(b) That the adaptation of law in force in Pakistan cannot be made by any Legislative Authority. The Council or, as the case may be, by the Azad Jammu and Kashmir Assembly, can legislate on any subject within the frame work of the Constitution independently but have no powers to adopt an existing law framed by the legislature of any country;
(c) That the conferment of the powers of Assistant Collector for the purpose of recovery is also illegal. No power can be conferred upon an officer who is not an employee of the Azad Jammu and Kashmir Government or Council;
(d) That the law has been enforced in Azad Kashmir in 1995, therefore, any recovery for a period prior to the enforcement of law, cannot be made, even if the law is validly enforced."
10. From the above it is clear that it had been duly urged and argued before the High Court, stated briefly, that functions of EOB Institution could not be extended to Azad Jammu and Kashmir and that powers cannot be conferred to an officer who is not an employee of the Azad Jammu and Kashmir Council or the Azad Government. As noted earlier this point has been urged in this Court in the memorandum of appeal.
11. We have heard the learned counsel for the parties, inter alia, on this point. Before proceeding further it will be useful to reproduce the Act of 1980. It consists of three sections, apart from the preamble:-- "(1) Short title, extent and commencement.---(1) This Act may be called the Employees Old-Age Benefits (Extension of Functions to Azad Jammu and Kashmir) Act, 1980.
(2) It extends to the whole of Azad Jammu and Kashmir.
(3) It shall come into force at once.
(2) Act XIV of 1976, etc., to apply to Azad Jammu and Kashmir.---The provisions of the Employees Old-Age Benefits, Act, 1976 (XIV of 1976), and the rules, regulations and orders made thereunder, as in force in Pakistan from time to time, shall apply to Azad Jammu and Kashmir and the Employees Old-Age Benefits Institution established under the said Act shall be competent to exercise and perform in Azad Jammu and Kashmir the same powers and functions as it may exercise and perform in Pakistan.
(3) Removal of difficulties.----If any difficulty arises in giving effect to the provisions of section 2 or of the 'Act referred to therein, the Azad Jammu and Kashmir Council may, from time to time, make such provisions as appear to it to be necessary for the removal of such difficulty."
12.The provisions of the Act, which shall also be referred to as the Extension Act, lays down that the provisions of 1976 Act made by the Parliament of Pakistan shall apply to Azad Jammu and Kashmir and the EOB Institution established in Pakistan shall be competent to exercise and perform the same functions in Azad Jammu and Kashmir. It will be seen that the first part relates to legislation and the second part relates to entrustment of powers in Azad Jammu and Kashmir to functionaries of the EOB Institution who are neither appointed or controlled by the Azad Jammu and Kashmir Council nor the Azad Government of the State of Jammu and Kashmir.
13.Before adverting to the arguments of the learned counsel for Jabeer Hotel, it may be pointed out that the learned counsel also raised the point that in any case the Azad Jammu and Kashmir Council was not competent to enact the provisions of Employees Old-Age Benefits Act becuase it does not fall under any of the items given in the Council Legislative List in the third schedule of the Azad Jammu and Kashmir Interim Constitution Act. The High Court has upheld the power of the Council to legislate on this subject as, according to the High Court it was covered by item No,15 in the Council Legislative List which reads as follows:-- "15. The law of insurance and the regulation of the conduct of insurance business."
' We are not presently attending to this point because this question will assume importance only if points relating to extension of laws and entrustment of powers reflected above are repelled.
14.As seen above the Extension Act, consists of two parts which have been described above.
Although objection has been raised that power to make laws does not include the power to extend laws in operation outside Azad Jammu and Kashmir but the main thrust of Jabeer Hotel is that functions of the officials of the EOB Institution cannot be extended to Azad Jammu and Kashmir.
Adverting to the first point it may be added that the objection that power to make laws does not include the power to extend laws is rather technical than substantial. According to the learned counsel for the Jabeer Hotel the word "make" means "to bring into existence by shapping or Changing material; combining parts; to produce; cause to exit; create;" but it A is well settled that no hard and fast rule can be laid down as to the manner in which a law is made by a Legislature. It may be take various forms. For instance referential legislation is a recognised form of making laws. In this type oflegislation a law made by any other legislature is enforced by the law makers without reproducing the phraseology of the already existing law. In such cases all what is done is that it is declared that a particular law specified in the legislation shall come into force. It is sometimes said that " it shall stand adapated' and sometimes other phraseolgy is used. To cite an example we may refer to section 4 of the Azad Jammu and Kashmir Council Finance (Amendment) Act 1979 which is to the following effect;-- "4. Adaptation of the Income Tax Ordinance, 1979.---The Income Tax Ordinance, 1979 (XXXI of 1979), and all rules made and notifications issued thereunder as in force in Pakistan from time to time, shall, as far as practicable, be in force in Azad Jammu and Kashmir subject to the following modifications namely:--
(i) reference in the said Act to 'Pakistan', Federal Government' and 'Central Board of Revenue' shall respectively be construed to be reference to Azad Jammu and Kashmir, the Azad Jammu and Kashmir Council and the Board of Revenue established by the said Council; (ii).
(iii).
15. This provision was examined in Ms. Spintex Limited Mirpur and others v. Income Tax Officer Government of Azad Jammu and Kashmir Mirpur and others (1998 PTD 2567) and it was held that except for the word "from time to time" the legislation was valid. In the provision of taw reproduced above the Azad Jammu and Kashmir Council had used the word "shall be in force in Azad Jammu and Kashmir". The following portion of the judgment is relevant for the present case:-- "Legislation by reference is accepted form of the legislation to which no valid exception can be taken, because when a law is referentially enacted the provision of the adapted law are before the legislative body in a concrete shape and members of the legislative body know what they are enacting. With a conscious mental exercise the law-makers decide that those provisions shall become law in the territory within their realm."
Therefore, we are of the opinion that no particular words are necessary for enacting a law. What is necessary is that it should be clear that the legislature has provided that a known set of legal' provisions, even if they do not form part of the enactment, were intended to be operative within the realm of the enacting legislature. It follows that the mere use of word "extension" by itself would not vitiate a legislation.
17. Now we take up the main point that the functions of the EOB Institution set up under the 1976 Act enacted by the Parliament of Pakistan could not be extended to Azad Kashmir and powers cannot be conferred on its employees the Azad Jammu and Kashmir Council or the Assembly. In other words the objection is that the Institution cannot function in Azad Jammu and Kashmir.
18. Azad Jammu and Kashmir has a written constitution. Azad Jammu and Kashmir Interim Constitution Act was enacted, as is laid down in its premable, to provide for the better Government and administration of Azad Jammu and Kashmir until such time as the status of Jammu and Kashmir is determined through a plebiscite to be held under the auspicious of the United Nations.
As is stated in the preamble it was enacted with concurrence of the Government of Pakistan Interim Constitution Act postulates that there will be two legislative bodies in Azad Jammu and Kashmir. One is the Azad Jammu and Kashmir Council which is headed by the Prime Minister of Pakistan, which term includes Chief Executive of Pakistan, and consists of six members who are elected by the Azad Jammu and Kasimir Assembly and five other members who are nominated by the Prime Minister of Pakistan. President and Prime Minister of Azad Jammu and Kashmir are also members of the Council. The Azad Jammu and Kashmir Council has power to enact laws under section 31(2) in respect of the subjects which are included in the Council Legislative List. The other legislative body is the Azad Jammu and Kashmir Legislative Assembly consisting of forty eight elected members, The Assembly has the power to make laws in all residuary matters which are not included in the Council Legislative List. The Council also has executive authority which vests in its Chairman. It is provided in subsection (7) of section 21 of the Constitution Act as follows:-- "(7) The executive authority of the Council shall extend to all matters with respect to which the Council has power to make laws and shall be exercised, in the name of the Council, by the Chairman who may act either directly or through the Secretariat of the Counsel of which a Federal Minister nominated by the Chairman from ationgst the members of the Council and not more than three Advisors appointed by the Chairman shall be incharge.
' Provided that the Council may direct that in respect of such matters as it may specify, its authority shall be exercisable by the Vice Chairman of the Council, subject to such conditions, if any, as the Council may specify.
19. It is provided in subsection (13) of section 21 that the executive E functions of the Council can be delegated to its officers, It reads as follows:-- "(13) The Chairman may regulate the allocation and transaction of the business of the Council and may, for the convenient transaction of that business, delegate any of its functions to officers and authorities subordinate to it."
20. Unlike Azad Jammu and Kashmir Council, the Legislative Assembly does not have any executive powers, The Azad Government of the State of Jammu and Kashmir enjoys executive powers in respect of the subjects which are within the legislative competence of the Assembly. It is provided in section 19 of the Constitution Act as follows:-- "(19) Extent of executive authority of Government.----(1) Subject to this Act, the executive authority of the Government shall extend to the matters with respect to which the Assembly has power to make laws.
(2)
(a)
(b)
(3) Notwithstanding anything contained in this Act, the Government may, with the consent of the Council, entrust, either conditionally or unconditionally, to the Council, or to its officers function in relation to any matter to which the executive authority of the Government extends."
21. It is provided in section 12 that executive authority of Azad Jammu and Kashmir shall be exercised by the Government consisting of the Prime Minister and the Ministers, Subsection (5) lays down as follows:-- "(5) The Government may regulate the allocation and transaction of its business and may for the convenient transaction of that business delegate any of its functions to officers or authorities- subordinate to it."
22. It is clear from the provisions noticed above that the executive authority of the Council and the Government can be delegated to officers and authorities subordinate to them. The Interim Constitution Act does not postulate that executive authority of Azad Jammu and Kashmir Council will be exercised by the functionaries or officers of the Government of Pakistan although the Prime Minister of Pakistan is the Chairman of the Council. It is equally clear that while performing functions as Chairman of the Council the Prime Minister of Pakistan cannot delegate any functions of the Council to an officer or authority in the Government of Pakistan although they are subordinate to him as Prime Minister.
23. According to the Constitution of Pakistan of 1973 and Azad Jammu and Kashmir Interim Constitution Act, 1974, Azad Jammu and Kashmir is not a part of Pakistan and laws of Pakistan are not applicable to the liberated territory of Jammu and Kashmir. Thus, the functionaries appointed under a particular law which is in force in Pakistan do not have the jurisdiction to function in Azad Jammu and Kashmir. It is provided in subsection (4) that the Federal Government shall establish an Institution called the Employees Old Age Benefits Institution which shall be a body corporate.
The Employees Old-Age Benefit Act, 1976 contains a provision in subsection (2) of section 1 that the said Act was to extend to the whole of Pakistan. The act does not visualise that it will perform functions in Azad Jammu and Kashmir. Section 7 lays down that there will be a number of trustees appointed by the Government and that four members shall be those who have been nominated by the Provincial Governments. There is no mention that it will also have a member from Azad Jammu and Kashmir. It is thus, clear that the EOB Institution is performing functions in connection with the Federation. It is set _ up by the Federal Government and is under its control. The functions which it performs are entrusted to it by the Federal Legislature and the Federal Government. Clearly it is not a functionary subordinate to the Azad Jammu and Kashmir Council. It follows that Azad Jammu and Kashmir Council could not delegate its functions to the said Institution.
24. In fact the constitutional position is that the Azad Jammu and Kashmir Council and the Azad Jammu and Kashmir Legislative Assembly are not empowered to legislate in respect of officers of the EOB Institution. Legislative powers of the Council and the Assembly are laid down in section 31.
Subsection (1) is relevant here.
"31. Legislative Powers,---(1) Subject to the succeeding provisions of this section, both the Council and the Assembly shall have the power to make laws--
(a) for the territories of Azad Jammu and Kashmir;
(b) for all State subjects wherever they may be; and
(c) for all officers of the Council or as the case may be, the Government, wherever they may be."
25. This provision manifestly lays down that the powers to make laws outside Azad Jammu and Kashmir is restricted only to State subjects wherever they may be and to officers of the Council and of the Government wherever they may be. The officers of the EOB Institution are not officers of the Council or the Government. Therefore, the Council or the Assembly cannot legislate for them. It means in other words that law cannot be framed so as to confer powers or functions on the employees of the EOB Institution by the legislative bodies of Azad Jammu and Kashmir.
26. It follows that the Azad Jammu and Kashmir Employees Old-Age Benefits (Extension of Functions to Azad Jammu and Kashmir Act, 1980 (Act X of 1980) was not competently enacted by the Azad Jammu and I Kashmir Council and was, therefore, void from its inception. The Azad Jammu and Kashmir Council (Validation of Laws) Act, 1995 also suffered from the same illegality so far as it purported to validate Act X of 1980. Consequently Act X of 1980 as well as the provisions in the aforesaid Validation Act relating to Act X of 1980 are struck down for want of legislative competence. The result is that all actions taken and orders passed by the EOB Institution in respect of Jabeer Hotel and steps/actions taken by the functionaries in Azad Jammu and Kashmir under direction of the EOB Institution were also without lawful authority and of no legal effect.
27. The Civil Appeal No,89 of 1999 titled M/s Jabeer Hotel v. Kashmir Council Islamabad and others filed by Jabeer Hotel is accepted in the terms indicated above and the writ petition filed by Jabeer.
Hote is accepted for the reasons stated in this judgment.
28. In light of the aforesaid dicta the other two appeals Civil Appeal No,90 of 1999 titled Kashmir Council Islamabad and others v. M/s Jabeer Hotel and another and Civil Appeal No,91 of 1999 titled Assistant Collector EOBI and another v. M/s. Hafiz Textile Mills Ltd., in light of the aforementioined dicta stand dismissed.